Common tax mistakes to avoid
HOUSTON (KTRK) -- April 15 is one of the most dreaded days of the year and it's less than a month away.
No one wants to pay more than necessary or run the risk of an audit, so here are several common mistakes to avoid.
Tax preparers are working long hours these days on tax returns and they see lots of mistakes. CPA Alan Rosen says one of the most common errors concerns filing an extension.
"The tax is due whether or not you file an extension on April 15th. The extension gives you time to file your return but the tax dollars are due," said Rosen.
Consumer Reports Tobie Stanger says another big mistake is not filing at all because you can't afford to pay your entire bill on tax day.
"No matter what you have to file your tax return. Usually you can set up an installment plan with the Internal Revenue Service and avoid a stiff penalty. But you're still going to have to pay interest," Stanger said.
You can find the forms on IRS.gov by typing "installment" into the search bar.
Another tax mistake is not claiming everything you are allowed. For instance, the Federal tax credit for energy-efficient upgrades to your home is commonly overlooked. If you made improvements that qualify, be sure to include those.
If you have elderly parents, you could claim them.
"If you pay more than 50 percent of your parents' living expenses, you may be able to claim them as dependents even if they don't live with you," Stanger said.
When it comes to charitable deductions, don't assume a cancelled check is enough to prove your generosity.
"For charitable contributions of $250 or more you're going to need a receipt from the organization showing the amount you donated," Stanger said.
If you claim business deductions, like meals, of course keep the credit card receipt but you also should note who attended and why.
Consumer Reports says if you do make an error on your tax return, all is not lost. You can always file an amended return to correct the mistake.
For more from Consumer Reports, click here.
